Storage Shakeout

EMC executive talks about his company's restructuring and new research objectives

EMC Corp. increased the visibility of its growing emphasis on open software development in December 2001 when CEO Joe Tucci created a new open software operating unit within the company and promoted Erez Ofer, former chief software architect, to head it. Ofer also displaced Moshe Yanai as head of research and development — a move that seemed allegorical, with Yanai symbolizing EMC's past hardware glory and Ofer standing for its more software-oriented future. Intelligent Enterprise interviewed Tucci about EMC's recent maneuvers.

What strategy does this restructuring signify?

Tucci: Our biggest public announcement of the year [2001] was EMC's new open software platform we call "Automated Information Storage," or "AutoIS" for short. It automates the complex, labor-intensive work of information storage management. It gives customers the ability to do more with less, in heterogeneous, multivendor storage environments. It doesn't represent a change in strategy or even a new strategic direction, just the public emergence of a strategy that EMC has been pursuing for some time.

EMC pioneered open storage hardware platforms that connect to just about any server and operating system in the enterprise environment. We've invested more in interoperability testing than any storage vendor, so we can be agnostic when it comes to protocols and network elements. Now, we're expanding the world's most open storage line to include management software that operates independent[ly] of storage hardware platforms. We've been at it for a while. Seventy-five percent of our R&D budget in 2001, nearly a billion dollars in all, went to software.

The elevation of Erez Ofer, our chief software architect, to executive vice president in charge of open software operations, simply reflects the growing importance of open software to EMC's strategy. And our push in software is helping to make services the fastest growing part of our business. But our largest source of revenue will still be storage hardware.

How do you respond to complaints that EMC has been tight with its software application programming interfaces (APIs) and suspicions that EMC will try to avoid some API exchanges by cracking competitors' interfaces on its own?

Tucci: EMC has taken the lead in exchanging APIs with other vendors. Our goal is to simply do it in a fair manner. Other vendors' APIs, however, are not necessary for EMC to deliver heterogeneous functionality. It is simply one way to enable interoperability. For example, EMC storage systems have supported virtually every server operating system, including mainframes, for years. This interoperability was achieved without API exchanges. In the end, the ultimate beneficiary is the customer, who will have the ability to better manage complex IT environments.

With competition for control of your own hardware opening up more — the double-edged sword of openness — does that make the software margins less desirable?

Tucci: AutoIS responds to what customers want. We have always found that when you deliver a unique, differentiated technology that solves customers' problems, the rest takes care of itself. This organizational alignment allows EMC to further extend our lead by speeding up the development of future platforms, functions, and AutoIS implementation. In fact, EMC is just beginning the most aggressive new product delivery schedule in the company's history.

The products to which Tucci refers include WideSky, a new storage "middleware," and EMC Control Center/Open Edition, announced in October 2001 for release in 2002.

— Jeanette Burriesci

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